CBE Blockchain Interoperability and Scalability 2 — Questions and Answers
Question 1: What is the Lightning Network's approach to scaling Bitcoin transactions?
- Payment channels that allow off-chain bilateral transactions settled on-chain only when channels close (Correct answer)
- Increasing Bitcoin's block size to 4MB
- Using ZK-proofs to batch Bitcoin transactions
- Moving Bitcoin transactions to a Proof of Stake sidechain
Correct answer: Payment channels that allow off-chain bilateral transactions settled on-chain only when channels close
The Lightning Network creates peer-to-peer payment channels where parties transact off-chain; only the opening and closing transactions are recorded on the Bitcoin blockchain.
Question 2: In Polkadot's architecture, what role does the Relay Chain play?
- It provides shared security and consensus for all connected parachains (Correct answer)
- It hosts all smart contracts for the Polkadot ecosystem
- It acts as a bridge exclusively to the Ethereum mainnet
- It stores all parachain transaction data on-chain
Correct answer: It provides shared security and consensus for all connected parachains
Polkadot's Relay Chain is the central chain that coordinates consensus and security, while parachains handle application-specific logic and connect via slots.
Question 3: What is a 'wrapped token' in the context of blockchain interoperability?
- A tokenized version of an asset from one blockchain pegged 1:1 and usable on another blockchain (Correct answer)
- A token with built-in privacy features using zk-SNARKs
- A token that automatically rebalances across multiple DeFi pools
- An NFT that wraps multiple fungible tokens into a single asset
Correct answer: A tokenized version of an asset from one blockchain pegged 1:1 and usable on another blockchain
Wrapped tokens (e.g., WBTC) lock the original asset in a custodial contract and mint an equivalent ERC-20 token on Ethereum, enabling cross-chain liquidity.
Question 4: What problem does the 'blockchain trilemma' describe?
- The difficulty of simultaneously achieving decentralization, security, and scalability in a single blockchain (Correct answer)
- The challenge of supporting three different consensus mechanisms at once
- The impossibility of bridging three different blockchain networks reliably
- The trade-off between transaction speed, cost, and privacy
Correct answer: The difficulty of simultaneously achieving decentralization, security, and scalability in a single blockchain
Coined by Vitalik Buterin, the blockchain trilemma states that optimizing for two of (decentralization, security, scalability) typically comes at the expense of the third.
Question 5: Which cross-chain standard does Polkadot use for message passing between parachains?
- XCM (Cross-Consensus Message Format) (Correct answer)
- IBC (Inter-Blockchain Communication)
- HTLC (Hash Time-Locked Contracts)
- ABI (Application Binary Interface)
Correct answer: XCM (Cross-Consensus Message Format)
XCM is Polkadot's language for expressing intent for cross-chain operations, enabling assets and messages to move between parachains and external networks.
Question 6: What is a 'state channel' and how does it improve blockchain scalability?
- A private off-chain communication channel where parties exchange signed state updates, settling only the final state on-chain (Correct answer)
- A dedicated high-bandwidth channel between full nodes for faster block propagation
- A smart contract that batches state transitions and submits them hourly
- A sharded partition of the blockchain state assigned to a validator subset
Correct answer: A private off-chain communication channel where parties exchange signed state updates, settling only the final state on-chain
State channels allow parties to conduct many interactions off-chain by exchanging cryptographically signed messages, posting only the final outcome to the blockchain.
CBE Blockchain Interoperability and Scalability 2
What is the Lightning Network's approach to scaling Bitcoin transactions?